Nice $40M ecommerce company – call me when it scales
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Re: Nice $40M ecommerce company – call me when it scales
#2Alternatively, you can base your business model on tricking people into subscribing to a service they likely don't know they're subscribing to.
Re: Nice $40M ecommerce company – call me when it scales
#3The re-engagement models listed seem glamorous and certainly are the current hot buzz. But, I doubt I'd call them sustainable. An established $40m company might try some of these, but should not rely on them as a core business model.
Incorporate flash sales as a daily deal feature, creating re-engagement and perhaps pushing lesser known or tough to sell products. I'd even argue that scarcity is good for a quick grab, but might be a turnoff for regular customers of a site that isn't focused solely on flash sales.
Subscriptions are a slippery slope for physical goods as well. You have to be careful to provide the customer with enough perceived value, while enforcing the notion that the value will be the same every month. At the same time, you can't strain your inventory or infrastructure to maintain the regular flow of these products.
Loyalty programs are probably the oldest, and safest trick in the book. Often times, can be done for free. Perhaps purchases earn points which are only redeemable on products you specify. Could help move problem inventory while saving a few points in payment processing fees.
One should tread carefully with all these options. Like the author mentions, there's plenty of room for innovation in this space.
It's possible that the $40m company is king of it's niche hill. If that's the case, they might look at leveraging their experience and infrastructure in other markets. All the while, working to keep the core business sustainable.
Re: Nice $40M ecommerce company – call me when it scales
#4Plenty of people make a decent living off of such companies and so do their employees. Why would anyone call Josh Hannah though, unless they no longer wanted to run their company? Let him buy and sell his overvalued, short-lived bubbles (to other people like him who do likewise) and run your own, solid $40m companies for as long as you enjoy it...
Re: Nice $40M ecommerce company – call me when it scales
#5If I could have a $40m/year business with happy employees, it sounds like a win to me. Figuring out some sort of profit sharing and adopting an internal culture of innovation to stay abreast of trends would make sense too.
Re: Nice $40M ecommerce company – call me when it scales
#6How many times can you denigrate Amazon in a single article? Articles don't need to be written in such a sarcastic, negative tone to be informative. The style makes me distrust the author.
Re: Nice $40M ecommerce company – call me when it scales
#7$40 million is admirable. You could do that with a flat team where everyone knows everyone else and operate out the back of an established retail business.
Scaling that up would mean having three tiers of management, scores of interns, nobody knowing the names of anyone in the warehouse, the product team not talking to the customer care team, whole departments dealing with accounts things, it just goes on. You could have 100-250 extra people without noticing, banks to pay off, vast premises to rent, a huge marketing bill, considerable IT infrastructure and so on.
This would be fine if you really were that smart and that good. Why, you could be the next Amazon.com, even put them out of business. What is alarming is that people think that way, they let greed and arrogance cloud their judgement. It is like a disease.
Re: Nice $40M ecommerce company – call me when it scales
#8$40 million is admirable. You could do that with a flat team where everyone knows everyone else and operate out the back of an established retail business. Scaling that up would mean having three tiers of management, scores of interns, nobody knowing the names of anyone in the warehouse, the product team not talking to the customer care team, whole departments dealing with accounts things, it just goes on. You could…
This!
Re: Nice $40M ecommerce company – call me when it scales
#9I don't think anyone is really implying that having a $40 million company isn't a good thing to have on your hands. The main idea of this article is the overall scalability of these types of companies from a VC / enterprise point of view. $40 million is a lot to me, but pennies to others.
With competitors such as Amazon, 40 million in a lot of cases might be 10% or less of the marketshare. Or it is 100% of the market but it is tapped out.
Ecommerce is kind of a vast term. I think it is also important to look at if the company drop ships, has inventory, or manufacturers goods in-house. Huge difference there.
Re: Nice $40M ecommerce company – call me when it scales
#10I'm not that much of a fan of the VC infatuation with winning on a handful of "unicorns" and "super-unicorns." Perhaps better for everyone (but the VCs) would be a healthy ecosystem of thousands of companies on the order of 10-50M dollars, and more financial support for getting to this "stage." (I use quotes because I don't think every company should aim to grow as big as Google or Facebook, or even Twitter or Github.)